Maidenform experiences solid performance from Control It & Flexees
Maidenform Brands Inc, a global branded marketer of intimate apparel, reported earnings of $0.33 per diluted share (EPS) for the second quarter of 2008 which included $0.01 per share associated with start-up costs related to the new women's intimate apparel license with Donna Karan International. EPS for the second quarter of 2007 was $0.39, including $0.06 cents per share of deferred financing costs related to the refinancing of the Company's credit facility in June 2007.
Second quarter 2008 results versus second quarter 2007:
• Net sales decreased 9.2% to $108.1 million with the majority of the decrease related to the previously announced net sales shift of approximately $6.0 million from the second quarter to early in the third quarter of 2008 predominantly in the department stores and national chain stores channel, with the balance of the decrease attributed to a more challenging overall retail environment.
• Department stores and national chain stores channel net sales decreased 15.8% to $57.4 million.
• Mass merchant channel net sales increased 11.8% to $28.5 million.
• Retail segment net sales increased 5.1% to $14.5 million, with same store sales up 1.9%.
• International net sales increased 2.9% to $10.6 million.
• Consolidated gross margins decreased 120 basis points to 38.7% due to higher wholesale net sales in the mass merchant channel versus the second quarter of 2007.
• Total cash and cash equivalents was $15.3 million at the end of the second quarter of 2008 and in line with the year ago period.
Maurice S. Reznik, Chief Executive Officer, stated, "While net sales in the department stores and national chain stores channel as well as the other wholesale channel were disappointing in the second quarter, we posted gains elsewhere across our portfolio, tightly controlled our costs and solidified new sources of revenue that will contribute to our projected top line growth of 8% to 12% for the second half of 2008.
These initiatives include expanding our assortment with existing customers, benefiting from the launch of new brands, and introducing new products and programs with customers that strategically complement our current offerings. We believe that these actions, coupled with building the new Donna Karan and DKNY women's intimate apparel licensed business that will commence in the beginning of 2009, will greatly contribute to the Company's long-term success."
Financial Results for Second Quarter 2008 versus Second Quarter 2007
Net sales for the second quarter of 2008 decreased $10.9 million, or 9.2%, to $108.1 million driven largely by lower net sales in the department stores and national chain stores channel. Wholesale segment net sales in the second quarter of 2008 decreased $11.6 million, or 11.0%, to $93.6 million.
Total international net sales, which are included in the wholesale segment, increased $0.3 million, or 2.9%, to $10.6 million. Retail segment net sales increased $0.7 million, or 5.1%, to $14.5 million in the second quarter of 2008. Maidenform's net sales performance by channel of distribution and product mix is highlighted in Exhibit 1 to this press release.